Hartford CEO says company 'well capitalized'

MichaelKitchen

Asia editor

NEW YORK (MarketWatch) -- Beaten-down shares of Hartford Financial Services Group soared Monday after it said that its capital levels are strong, despite concerns about the company's capitalization last week.

"The Hartford is financially strong and well capitalized," Hartford Chief Executive Ramani Ayer said in a statement.

The company said its capital margin -- the capital in excess of rating agency requirements to maintain AA level ratings -- would be approximately $2 billion at year end, assuming a year-end S&P 500
SPX, +0.01%
level of 900. This compares to an estimate of $3.5 billion the company made on Oct. 6, which assumed a year-end S&P 500 market level at 1165.

The S&P 500 closed trading Friday at 968.75.

The statement followed an announcement Friday by Fitch Ratings that it was lowering Hartford's issuer default rating to A from A+, and its insurer financial strength ratings of Hartford's primary life and property/casualty insurance subsidiaries to AA- from AA.

On Thursday, Hartford
HIG, +1.17%
lost more than half its market value on concern the insurer may need to raise more capital after reporting a big third-quarter loss the day before and saying it couldn't gauge the amount of extra capital it has because of market volatility. See full story.

Hartford shares were up nearly 40% in afternoon trading.

However, Moody's Investors Service on Monday downgraded the senior unsecured debt rating of Hartford to A3 from A2 and its short-term debt rating to Prime-2 from Prime-1. The rating outlook is now stable, the ratings agency said.

"The Hartford's recently released final third-quarter results and continuing weakness in both credit and equity markets have confirmed our concerns," said Jeffrey Berg, Moody's senior vice president, in a statement.

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